EP 10 | Endangered: Your Right To Repair Your Car
The driveway mechanic is a staple of American life and culture. But the right to repair our own cars is in real danger of being extinguished. We speak with three people fighting to preserve it.
Automobiles are the only category of product where a formal right to repair exists in the U.S., thanks to a law passed in 2012 by voters in Massachusetts. But that right is under threat. After voters in Massachusetts expanded a 2012 law in November 2020 to include access to telematics data, automakers challenged the law in federal court. That has prevented its implementation for more than two years. A decision in that case is expected soon.
In the meantime, manufacturers like Tesla are increasingly using access to software and administrative features to stymie owner and independent repair and servicing of their vehicles and establishing de-facto monopolies on parts and maintenance. Where do things go from here? We invited three people who are on the front lines of the fight to repair your car. They are:
Catherine Boland, VP, Legislative Affairs for the Motor & Equipment Manufacturers Association
Justin Rzepka, Executive Director, CAR Coalition
Michael “Mike” O’Neal, President, Diamond Standard Parts
Paul Roberts (Fight to Repair): Okay, so welcome back to another issue of the Fight to Repair podcast. I'm, Paul Roberts, I'm the host. Editor of the fight to Repair Newsletter and founder of Secure Repairs, and we've got an amazing panel of people here today to talk about what I think is one of the most kind of poignant and important issues in the right to repair conversation which is automobiles and cars fixing our cars. And it's a really interesting topic. It's one of the areas where in the United States we actually have something like a right to repair, but one that is I think, increasingly under threat. And so we've got some folks here with us in the studio representing different parts of the kind of the car ecosystem who are here to talk to us about what's going on down the trenches. And I'm gonna just start and ask them to say hi and introduce themselves. Michael O'Neil, why don't we start with you?
Michael O'Neal (Diamond Standard Parts): Fine. I'm Michael O'Neill. I'm the [00:01:00] president of Diamond Standard Parts llc. I've been in the bumper business for 58 years from everything from rechrome bumpers to manufacturing, stamping manufacturing, automotive plating, distribution and logistics. I've been throughout the whole industry my whole life, basically. The things I want to cover, if you want me to start now, Paul
Paul Roberts (Fight to Repair): Michael, where are you? Where are you based?
Michael O'Neal (Diamond Standard Parts): I'm based in Memphis, Tennessee. Yeah, that's where our headquarters are for marketing and sales and our manufacturing facilities in the United States and Taiwan. Both. So what I look at right now is they're the motor companies and I'm gonna stay with GM cuz they're the biggest thing on the table right now.
What I see. from all my studies is an intentional patent abuse. They're [00:02:00] getting design patents for functional items they knew were primarily functional. I'm bumpers and other parts in a crash management safety system are totally and purely functional for safety and collateral damage due to concerns dictated by federal law.
NHTSA IHS. In both low and high speed crash tests. Therefore, that part can't be substituted unless it's to the same like kind and quality of the design used. Which design is blocked by patents in the aftermarket. Further, if the design can be altered and still perform the same function, it is ornamental and patentable, which is just clearly not okay, so let me just paraphrase this by GM advertising article that states - the caption is "Put your best front forward with OE [00:03:00] Bumpers, facials, and grills."
And the quote is, "the front end of the vehicle may as well be called the business end. It is the most important part of the car cosmetically, but also plays a big role in the safety of the vehicle." Now, if that doesn't describe 'function,' I don't know what does.
Paul Roberts (Fight to Repair): Okay, OE original equipment. Okay, Justin say hi to the audience. Tell us a little bit about yourself and and why you're here.
Justin Rzepka (CAR Coalition): Hey Paul, thank you again for having me on. I'm really excited about today's conversation. So I'm Justin Rzepka and I'm the Executive Director of the Consumer Access to Repair or CAR Coalition - carcoalition.com. So we're a group of independent parts manufacturers, distributors repair companies and parts distributors and insurance companies. And we were formed two and a half years ago to a reduce the rising cost of auto repair. We primarily are working here in Washington, DC at the federal level , working with Congress and policy makers. So we've got [00:04:00] legislation I wanna talk to you about today. We're working with some of the Federal Trade Commission, the Department of Transportation. Another thing, some of the members of a coalition are Mike at Diamond Standard, as well as uh, LKQ Auto Zone, carparts.com, Farmers Insurance, Geico and Allstate. So it's a really well rounded group from the beginning of the repair all the way to the end. And so thanks again for having me.
Paul Roberts (Fight to Repair): That's great. And yeah, we're gonna talk about some of the legislation that's up there on Capitol Hill as well as in the states now as well. Catherine, how you doin'? .
Catherine Boland (Equipment Manufacturers Association): I'm good, Paul. Thanks so much for having me. I'm Catherine Boland. I'm Vice President for Legislative Affairs at the Motoring Equipment Manufacturers Association. I'm here today on behalf of our aftermarket division, the Automotive Aftermarket Suppliers Association, and we're the association that represents aftermarket parts, components and systems manufacturers. We're committed to ensuring that the millions of vehicles on the road today are safely, appropriately, and affordably maintained, repaired and [00:05:00] serviced to keep consumers on the road. And one of the things my aftermarket members are truly committed to is affordable options and supporting the independent aftermarket to ensure that consumers can keep repairing their vehicles. And I'm looking forward to an interesting conversation.
Paul Roberts (Fight to Repair): It's really great having you all here. I guess what I'd start with for our audience, and this the Fight to Repair podcast. These are folks who are focused on the repair issue. Automobiles are really one of the few categories of products in the United States, north America, where something like a Right to Repair exists. I wondered, and Catherine, maybe you're the best one or Justin to delve into this... What is the state of the right to repair automobiles in the United States right now? Where does that right come from and, how healthy is that as we speak right now in November, 2022.
Catherine Boland (Equipment Manufacturers Association): Happy to start. And Justin, feel free and jump in if there's things you want to add. Voters in Massachusetts [00:06:00] back 10, 12 years ago passed a referendum requiring OEMs to share repair information so consumers could get their vehicles repaired. That led to a nationwide MOU between - at the time- two of the large trade associations representing vehicle manufacturers and the Autocare Association, ,the trade association we work closely with and have a number of joint members across the board. What it didn't address, Is telematics data and it also didn't really provide an adequate way for consumers to raise concerns if they consumers or repair shops, if they weren't, if the needs of and the requirements of that MOU were being met.
However, cars since 2012 when that MOU was signed have dramatically changed. We've gone from cars with Electronic Control Units - ECUs- [00:07:00] that only having a handful in the vehicle to dozens in a vehicle. So much more of that vehicle is computerized right now that the auto makers are taking advantage of vehicle technology advancements and we fully support those advancements, but making it harder and harder for consumers to get their vehicles repaired.
In 2020. Voters in Massachusetts went back to the polling places on election day and added telematics to the requirement that has been held up by the trade association representing the automakers for over two years at this point. And w e haven't been able to see any action because it's been delayed seven times by the judges or by the judge up there in Massachusetts. What's also happened in order to comply with the law, you've seen two automakers turn off their telematic systems in Massachusetts for vehicles registered there.
So that means that consumers don't have access to some of the infotainment. They don't have access to [00:08:00] some of the communications of that vehicle. They're not getting the vehicle they've paid for. So one of the things that we're looking at this as you - we need a federal solution. We don't need a patchwork of 50 states with different standards with different criteria. So that's one of the reasons why we're here in Washington focusing on legislation that will provide this information, as well as creating an enforcement mechanism to allow consumers and shop owners to go to Federal Trade Commission and get some enforcement to ensure that they're able to repair their vehicle.
And as second to a house- and not everyone owns a home -a vehicle is the largest purchase most consumers, many consumers are going to make or the second largest.
Paul Roberts (Fight to Repair): Justin, what's going on with this Massachusetts law and what impact, if any, is it having at the federal level in terms of getting some kind of federal right to repair passed?
Justin Rzepka (CAR Coalition): Yeah. Yeah. Thanks Paul. Yeah, Catherine absolutely nailed it on how important that MOU was, 10 years ago. But that's been [00:09:00] eroded and really what we're talking about here is maintaining the status quo, Paul, right? We're not looking for anything new. And you're right that -sometimes with policy makers- they are confused about what we're talking about because there is a great history of automotive right to repair, right?
Currently 70% of automotive repair is done in the aftermarket. That is, is a success story, but with lots of things in life, you wanna look at the trend line and the trend line is going the wrong way, right? That is eroding. And so getting policy makers understand that we don't want anything. The members of the coalition want the same things that they get now, which is access to that data so that their consumers or the car owners can get those cars fixed affordably, and reliably to your question, Paul, in Massachusetts, so like Catherine mentioned, it was past two years ago.
security-ledger-podc_car-repair-panel_justin_rzepka-nv1pmjtt0_cfr_2022-nov-09-1933pm-utc-riverside: I, I was quoted in the Boston Globe last week saying, we have, we're reaching a sad anniversary. It's two years and they haven't implemented the law. And you mentioned the keyless entry - that is a decision by the OEs (original equipment makers). The the State Attorney General and the car companies agree to stay the law until the lawsuit has played out, and so there is no [00:10:00] enforcement of the law.
So that was something they chose to do. Like you, you suggested Paul, I think to confuse consumers or to take away data. Nothing in the initiative that passed, by the way, it passed 75% to 25 more people voted for the ballot initiative than owned cars in Massachusetts. So just to give you a sense of how popular it is.
And so all they wanna do, Paul, is have access to that vehicle information. It has nothing to do with keyless entry or with OnStar or any other, the proprietary onboard computers. This is about giving the owner of the car - like Catherine said -the second most expensive or the most expensive thing you ever purchased, the ability to get that data so you can take your car where you want it to get it repaired.
You can go to the dealership, you can do it the independent, or if you wanna fix it yourself. That's not what I'm gonna be doing Paul , but if you wanna do it yourself, you can.
Paul Roberts (Fight to Repair): People do. Yeah.
Justin Rzepka (CAR Coalition): people do. But right now that choice is being eroded.
Paul Roberts (Fight to Repair): Hey, Michael, you've been, you said you've been in a, you've been in a parts business for half a century. Historically, it's been a very good [00:11:00] business to be in. Talk, if you could just a little bit about how you've seen that, that business change in recent years and some of the, dynamics, as Catherine was talking about, the increased kind of use of ECUs and software within these vehicles. You know how that's impacting folks like you.
Michael O'Neal (Diamond Standard Parts): Well, you when you go back to the days of the Rechromed bumpers, before there were stampings and other aftermarket parts that could be supplied you didn't have the ccc, the estimating systems. You didn't have that data. You didn't have access to the all the online facilities you do now. It's been a different business and it was rolling really well until this patent thing came up.
Paul Roberts (Fight to Repair): When did that start happening with the design patents? On, parts, side view mirrors and bumpers and stuff like that.
Michael O'Neal (Diamond Standard Parts): Early 2000s and accelerated. The last three years it's gone crazy. It's easy to do. If you get a design patent, it's cheap. It gets rubber stamped, boom, it's done. But the problem with that is it's [00:12:00] leading to terrible issues for lower and middle class income.
Americans, they spend 24 to 30% of their income on transportation costs. Now parts are going through the roof, total loss rates are up, insurance premiums are up and rising. I just saw an article just now where Geico claims are up 19 percent. First, nine months of this year all states up 10 plus percent, two and a half billion dollars.
And replacement parts costs are the main reason. Repair costs...
Paul Roberts (Fight to Repair): You're saying there's a direct link between this practice of design patents and like you said, cars being declared as totaled, increased price of of claims.
security-ledger-podc_car-repair-panel_michael_o_neal-qni9xjep2_cfr_2022-nov-09-1933pm-utc-riverside: Absolutely lemme give you an example. The GM Sierra front bumper face bar in 2017 was $483. It weighed 26 pounds, 2019, $1,109, and it weighs four pounds less. [00:13:00] Okay? Almost the same design, or they should be Silverado rear bumper face bar 2007 was $299, weighed 30 pounds. Now it's $858. And weighs 22 pounds.
So the manufacturing cost to both these things I just talked to you about, cause I'm a manufacturer, you can have this saying chrome plated, manufactured chrome plated put in a box for around $145 to $169. Okay? So now GM's gonna spend 2 million on tooling and half million on design. They're gonna sell a million vehicles.
That's $2 and 50 cents a piece. Plus they get to depreciate all the tooling. So what are they really doing here? They're just gouging the American public. It's crazy. And since they if you wanted to go on past it, they made $41.9 billion in the third quarter.
Paul Roberts (Fight to Repair): So could you talk just about for you, how does a design patent keep you from doing what you do? This [00:14:00] is a design patent on the actual kind of shape and contours of the part. Why does that matter? How does that affect you?
security-ledger-podc_car-repair-panel_michael_o_neal-qni9xjep2_cfr_2022-nov-09-1933pm-utc-riverside: When you, they build the vehicle has to be tested and low speed, high speed, up to 40 mile an hour, offset tests, other tests that the government... so you can't replace that part that's been tested with anything else but that. And if there, you can make that part, there's not a problem to make that part in the aftermarket.
The problem is if it's a, if you don't have a royalty agreement, the design patent, you're locked out for 15 years. So that's what that doing is making a tremendous competitive advantage for the OEs and none for the aftermarket. Here's what happened and here's what's happened lately. That's of concern to me. It should be a concern to Justin GM abandoned their royalty agreements, they had with LKQ and another company three years ago. What they have done [00:15:00] here. And if you're a baseball fan, you know what a backdoor slider is? They created a backdoor monopoly. They started out, they were challenged, they acceded to a royalty payment agreement, and now they're emboldened to just shut those royal payment down if they get away with it. Ford will do the same thing, so will Chrysler. I predicted this six years ago, this, that this was their plan.
Paul Roberts (Fight to Repair): So Justin I know you know the stuff Michael's talking about. I know that there is a bill on Capitol Hill to specifically address this design patent issue. So if you could speak to that and also the backdoor monopoly issue as well. I would assume. That might be something that the FTC is interested in.
So what's going on in terms of getting the federal government, which to its credit is increasingly showing an interest in these types of anti-competitive practices getting them involved in this in this part of the market.
Justin Rzepka (CAR Coalition): Yeah, thanks Paul. And and Mike is the expert, obviously been running a business for a long time, so he knows very much about this issue here in Washington, DC like you mentioned Paul, [00:16:00] there's a bill before the House Judiciary Committee called the Smart Act. It's a bipartisan bill, three Republicans, three Democrats, Mr. Isa of California, and Ms.. Lofgren of California are the two leads. And that bill basically says if you have a design patent for an automotive vehicle, you're allowed to have that design pattern for 30 months, and then after the 30th, you can then sell those aftermarket parts in those 30 months. You are also allowed to design the pa the part you're allowed to test it. It's essentially granting a 30 month monopoly. What they're doing is they're reducing that monopoly from 15 years to 30 months. And as the average life of the car on the road today is 12 years. It gets, it's longer every. But that essentially means that part cannot be reproduced for the life of the car. Not a lot of 17, 18 year old cars out there. So that's what that bill would do. It's a very simple. The bill is three pages. It's a very short bill. There's not a lot to it. And like Mike said, this is a direct pushback on what the car companies are doing. And, if you look at the filing of design patents on automotive parts, it's like a hockey stick, right?
It basically just spikes in [00:17:00] '06 '07 and they haven't slowed down. They took their, they took a page out of another industry's playbook and they just started. Like Mike said, just started design patents and they're getting rubber stamped and they'd rather sort it out on the docks with the with the customs agents and in courts than actually trying to get those parts parts to the market.
I have lots of car coalition members who are, dealing with seizures and they're dealing with all sorts of things at the docks, and, three years later their parts are still there or they're broken or damaged. It it defeats the whole purpose in having 'em manufactured.
Paul Roberts (Fight to Repair): We see the same thing happening with Apple replace, the aftermarket screens and other parts even Apple original parts that, that might be taken off of devices and, brought into the country to. Go to repair shops. Same thing. So Apple and TechNet will get customs and border patrol to seize those shipments and say that they're pirated goods.
And then it's up to the small business owner to haggle with the federal government to try and get their parts
Justin Rzepka (CAR Coalition): The onus is on the manufacturer. Which is the other way that our system normally works.[00:18:00] And Paul, your point is really great on all these other design issues that, you talk a lot about in your podcast, Paul, but the, the car, know, not. Phones are very expensive. You can get a new phone, you can get a new, dishwasher. You can't just go out and buy a new car, like Mike was saying, total losses, one in five, according to my insurance members. One in five accidents result in a total loss. That is staggering for the costs because they start to run the numbers and the.
The parts that are replaced, the maintenance, the labor, supply chain issues. They just add it up and they say it's cheaper just to replace the vehicle or to give you your total loss check. And so that's not something the car com, the insurance companies wanna do, right? They wanna get your car back to you and fix it.
But that's why rates are going up because, they have to be able to get these cars repaired. So this is a really serious problem, and it's only getting worse like Mike said.
Paul Roberts (Fight to Repair): And as we've talked about, obviously one other big part of this is it's a huge cost to the environment, right? Of totaling a car that is basically a functional vehicle. And Michael, you're, as you said, that's a function of just the increase in parts and service associated with these kind of, parts monopolies.
Justin Rzepka (CAR Coalition): [00:19:00] LKQ as a founding member of the car coalition. They're the world's largest auto recycler and and they deal with this all the time and and they wanna be able to recycle more and tear more parts apart. And some of these parts are difficult to recycle because of these VIN burning other things they're doing some of these other anti-competitive practices.
So yeah, so the industry itself is very green in this space.
Paul Roberts (Fight to Repair): One other thing that I've noted too is just obviously we do a news roundup around repair stuff, so things bubble up through that is. A lot of conflict or tension. And Michael maybe you're the person on this around advanced driver assistance features lane assistance and so on that rely on a combination of software and cameras and sensors to control the vehicle's activity, which is good.
Those are. Great features, accident prevention and so on. But it seems increasingly like they are constricting the ability of independents to do parts replacements, because the manufacturers are basically saying you can't, you have to let us do that because we're the only ones who can calibrate it.
We've [00:20:00] got the tools. They have to be calibrated very specifically, or the ADS isn't gonna work. Is that, am I imagining that or is that a real thing that's happening right now?
Michael O'Neal (Diamond Standard Parts): That's a reality. They're trying to restrict. Sale of plastic fascias because they have the ADAS in 'em. They're trying to say, you can't repair 'em. You can't have an aftermarket one, which is BS because you can absolutely make the same part.
What we see in the, in our business is which is we don't make those parts, we make the bumpers and rebars and all the structural safety parts is that we're starting to see a slight trend. And our part's not being available, but not the numbers that we think they ought to be.
Paul Roberts (Fight to Repair): Catherine, what impact is this having on the auto aftermarket?
Catherine Boland (Equipment Manufacturers Association): It's, it is having an impact. This is one of the things that we full disclosure, we also represent OE suppliers, meaning the companies that make the technology that is sold to the vehicle manufacturers in many cases, these are [00:21:00] the same companies. They're large global tier ones who are also large global aftermarket suppliers.
This is something this technology should be able to be repaired. I agree with you completely. It's life saving technology. It's critically important. We'll help bring down the tens of thousands of lives that are lost on our roadways each year, but at the same time, a consumer needs to be able to get that repaired.
Which includes calibration and recalibration. One of the things we're doing and working closely with Justin and his coalition is supporting Bobby Rushe's REPAIR Act, which one of one of the many things that requires is calibration and recalibration data. To return those systems back to their original manufacturing specs, whether because it's being replaced due to an accident, whether your windshield is being replaced, due to a crack, due to a crack, or just something's gone wrong with the sensor.
security-ledger-podc_car-repair-panel_catherine_boland-yrsc0lqmz_2022-nov-09-1933pm-utc-riverside: If you [00:22:00] don't have an aftermarket choice and you're driven back to your dealer as a vehicle, Owner, you're going to be paying significantly more for that repair and the dealer network. Not to mention delays, not to mention limited bay capacity at the dealers. So it's gonna, going down this road without some sort of federal action or some sort of limitations is going to make it more difficult for consumers to be able to repair their vehicles.
And in turn, it will limit aftermarket companies from being able to manufacture these parts that are good, replacement parts.
Paul Roberts (Fight to Repair): I often get the sense that it's like the frogs in the boiling water scenario, right where these changes are. Happening slowly over time. Things are getting more expensive, it's getting harder to find service providers. You know your car, you get in a minor accident, suddenly your car's totaled and you're like, how the hell did that happen?
That wasn't a big accident. And consumers don't send, don't see the impact of the change until long after it's happened. What reaction are you getting from [00:23:00] lawmakers? And I guess one question for Catherine, Justin, why can't we get these bills passed when the problem seems both acute and pretty easy to grasp for lawmakers, they all own cars. They've all been to the car dealership and independent garages, so they know the deal.
Justin Rzepka (CAR Coalition): Yeah it's a great question, Paul, and I want Catherine to, to back me up on this. We do once we explain the issue a little more, Paul Congress by nature is a reactionary body, right? They're not great at being proactive, right? They, the crisis is at hand, or, after the hurricane, we bring the money in or FEMA comes in, or let's fix this tax loophole because someone has exploited it, right?
So they're not great at being proactive and. Today 50% of these cars, 60% of these cars that are today have this telematics issue. In a few more years, it's gonna be close to a hundred percent. So we're seeing it in the newer cars. The 2022s. The 2021s, it's happening. So you talk to a staffer on the hill, a congressional staffer right they're 25, they're 28. Maybe they're driving their parents, old car, so they're the ones who are getting it fixed. This is happening in newer cars, so some members haven't run into this. They do run into the the the collision part issue that Michael was [00:24:00] talking about. So the data issue itself is something that, like I said at the beginning, we're trying to maintain the status quo.
Or like Mike was saying, they could put the bumper on the car, but they can't get it calibrated.
So now you gotta take it to the dealership to get calibrated and it's gonna take three more weeks. And so these repair restrictions are happening, but they're happening slowly and they're happening over time. And so getting Congress to sometimes pay attention can be tricky. Having said, The repair Act that Catherine mentioned, we have 16 co-sponsors, bipartisan Republicans, Democrats, urban members, rural members.
It is, it's an issue that's resonating, whether it's an issue of freedom about doing what you want with your own car or whether it's a cost issue. Being able to fix that car, like Catherine mentioned it's against the law in a lot of states to drive with a cracked windshield, or to drive with a broken bumper. So what are your choices? If you have limited choices, prices go up. You know what, Paul? Sometimes you don't get it fixed, so now you have an ADAS sensor that's not functioning because you can afford to get it fixed. Or your rain sensing windshields not working properly. Those are the costs or the [00:25:00] choices that people have to make when they're not left with with choices in the marketplace.
Catherine Boland (Equipment Manufacturers Association): I'll add to that. I think consumers at this point aren't realizing that this is an issue. Your frog in the boiling water scenario is absolutely right. One of the industries that's a little further further along in the political debate than the autos is the Ag equipment industry. Farmers have been complaining very loudly about John Deere and without action. I think we're gonna go down the exact same path, which is why we're having these conversations in Washington that we're having, but consumers. They're not driving it yet. They will be, I think without some sort of congressional action over the next term of Congress.
But the one, one of the concerns I have is, without action by Congress, sooner rather than later, we will have missed the boat. And technology will have gone in such a direction that you can't put that genie back in the bottle to go down another cliched road. But because [00:26:00] consumers aren't seeing it your vehicles with ADAS technology- I first bought one in at the end of 2016, cuz I believe in the technology, but a lot of consumers are not there yet, or they're still going to their dealer to get those vehicles repaired. So they haven't run into the challenges of having an aftermarket shop try to repair them, with the exception of someone returning a vehicle or repairing a vehicle after a crash, as Mike and Justin have both mentioned. So I think as you see these vehicle. Get older, more prominent on the roads, you will start seeing consumers realizing, Hey, wait a second. I can't get this vehicle repaired. I'm going to get sent back to the dealer. That's my only option. And so I, I just don't think consumers are quite there yet.
They're fully aware that when they're frustrated, they drop their phone and they can't get that glass replaced at. The farmers are fully aware, but just your vehicle consumers aren't quite there yet. It's.
Paul Roberts (Fight to Repair): Part, partially because they do [00:27:00] have right to repair in, in, mo, in, for the most part. But that's getting narrowed right by the technology and you're right, they, I don't think they do realize it yet. Also, just the availability of repair. Michael, are you encountering that just in your work this, like Justin mentioned this sort of, yeah, we can do the repair, but you still have, and which is something you hear about a lot in the agricultural equipment industry. "Yeah, I can do the repair, but you still have to go back to the dealer to get the code punched in, get the part synced or accepted by the vehicle.
Michael O'Neal (Diamond Standard Parts): No, we're, that's not in our bailiwick there, so we don't have that problem. Our parts are steel so there's no, there's nothing goes on with that. What I think is that Congress needs to look at and I think the everybody needs to look at is the environmental impact that the total losses are causing on the country.
When low and middle income Americans get in a collision using unnecessarily high OEM parts, it often exceeds their insurance coverage. So what are they gonna do? What can, when working class citizens cannot [00:28:00] afford the additional repair costs, their vehicles are a total loss, depending on the year, make, and model of the car.
These funds are often insufficient funds to purchase a comparable vehicle. Again, and like I said before, that 24 -30% of a lot of the families is transportation costs.
Paul Roberts (Fight to Repair): Yeah.
Michael O'Neal (Diamond Standard Parts): This threatens the mobility, their livelihood. It's an important social consideration. However, an unnecessary total loss of serviceable vehicles is an environmental consideration.
Okay? Now according to the EPA, it takes 39,000 gallons of water to manufacture one new car. Okay? On the water of that water, 2002 gallons are needed to produce four tires. So there's a lot of environmental things go on here with totaling a car that is, can be repaired with the right parts, with cheaper, not cheaper parts by, by any manufacturing standard, but less expensive parts [00:29:00] because we're not trying to make a 500% profit.
Paul Roberts (Fight to Repair): Right.
Michael O'Neal (Diamond Standard Parts): Okay? and those parts are viable. So what I'm saying is social injustice in the car, parts market is an important issue and you shouldn't have a lifetime indenture to the motor companies for your parts.
Paul Roberts (Fight to Repair): Yeah, you're so right. I think there is this kind of, "Let them eat cake" attitude a lot of times amongst sort of lawmakers and definitely the lobbyists of what's a big deal? It's under warranty or you'll just get, they. They don't understand, I think intuitively how close to the edge so many families are in this country and how one, a few hundred extra dollars on a car repair could be the difference between paying rent or buying food and medication or not.
And I think often that's just really lost at the level of policy discussions. I don't know if you feel that way guys.
Justin Rzepka (CAR Coalition): Yeah, Paul, I guess what I would say to you about that is yeah, absolutely. I think that sometimes, there's, like I said, the crisis at hand or it's sometimes hard to focus in on these. More policy [00:30:00] issues. I do think it's hard to pass bills in Congress. I think that's the way it was set up by our, by the founders.
I think they, they did make it difficult for good reasons, they wanna make sure it's properly vetted. Having said that I do wanna make sure that people understand how much the Car Coalition and Catherine's group, how much we've accomplished. The Rush bill, the REPAIR Act was introduced in February of this year. That is the first bill ever in Congress that grants car owners access their vehicle data. That was just nine months ago. President Biden tweeted out that if you own something and you should be able to get it repaired where you want, when you want. This is the president of the United States.
Talking about a repair issue. Senator Ted Cruz from Texas who doesn't agree about on almost anything said that getting your car fixed where you want it, how you want it, is an issue of freedom and absolutely this should be worked on. So you've got the bipartisan issues. The Federal Trade Commission voted unanimously four to zero to say that there are competition concerns with OEs, restricting parts and data access. So it's hard work here in Washington and I wish I had a magic wand [00:31:00] to make everything happen quickly, but we have moved the ball significantly in the automotive space and I'm really excited about next Congress and getting these bills down the pike.
And I'd love Catherine amplify or clean up what I missed. But it's been a busy year here in Washington.
Paul Roberts (Fight to Repair): Indeed Catherine.
Catherine Boland (Equipment Manufacturers Association): Yeah, and just to add to what Justin said, in addition to a busy year in Washington, we saw over 25, I think the total count is 27 states who. Some sort of right to repair legislation over the last two years. I think that number's going to grow substantially as we go into the next two year term of most, or one year or two year term of most state legislatures.
We have momentum between what the President has done, what the FTC has done. Massachusetts voters, Maine has a referendum coming up on autos. New York State legislature passed something on electronics only. There was a Colorado bill that, I don't remember exactly what it was on...
Paul Roberts (Fight to Repair): wheelchair
Catherine Boland (Equipment Manufacturers Association): Wheelchair Right to Repair. Thank you. We've [00:32:00] got momentum and... two hearings in the House of Representatives within the last six weeks. I think we're gonna get a lot more people talking about this issue in addition to the two bills that Justin and I have talked about.
You've got. Agriculture equipment, right to repair in the US Congress. You've got electronics right to repair. You've got a bill out there that gets that makes permanent the circumvention exemption for software for repairs. So lots of people are having lots of little conversations on this. We just need to make sure that they all bring all of those conversations together and act on it.
security-ledger-podc_car-repair-panel_paul_roberts-9f8aonvmz_cfr_2022-nov-09-1933pm-utc-riverside: There's often a, I think the electronics right to repair people and the car right, to repair people often stay in their corners because they don't wanna muddy the water too much around the discussions, the terms are slightly different.
The problems are slightly different. Is that the best way to proceed? Or like, Catherine, as you said, is it everybody coming together and saying, this is, we're all actually just asking for the [00:33:00] same thing. It just applies across all these different categories of products, appliances, cars, home electronics, et cetera.
We just need this overarching, right? Or is it better to do it from a legislative policy standpoint, piecemeal, take care of cars, take care of, personal electronics, take care of medical devices, and go that way.
Justin Rzepka (CAR Coalition): The CAR coalition, we're really like, it's in the title, right? We're focused on automotive. I think I think all these issues have, their strengths and weaknesses and so my coalition members the insurance companies, the. To people. They want us focused on cars. I think a rising tide lifts all boats, but I think, from what we work on, that's what's important to my members.
And and Congress, ultimately, they're the ones who get elected, right? They have the voting certificates. And so they're ultimately gonna decide how they're gonna handle this. It's not really for us to to decide how they move these things. And, and again, and my members, they joined the coalition to to get us to focus on cars.
So that's where we're focused on. But, I think as you mentioned, Paul, I think, ultimately up to the the policy makers to decide how they're gonna solve this.
Paul Roberts (Fight to Repair): One, one issue I think with this Massachusetts thing that the issues of Massachusetts, and again, that law that was expanded [00:34:00] by voters in 2020 has been held up in courts for two years, is again, you've seen Kia and Subaru basically shut off telematics features rather than comply with the law.
My sense is if the judge rules in favor of the voters and the ballot measure, you might see other automakers follow suit and just say we can't comply. It's hard, it's easy to do that when you've only got one state, right? You've only got a few million vehicle owners and the auto makers will just take the hit.
It's harder if you've got 10 states. What do you think I know you mentioned Maine is introducing has introduced or is in the process of gathering signatures to introduce a ballot measure for similar law to the Massachusetts one for Maine. Are there other, do, should we expect other states to do the same and try and get this happening at the state level, even if it doesn't happen at the federal level?
Catherine Boland (Equipment Manufacturers Association): So we really are focused on a federal solution. We don't wanna see a patchwork of solutions. I know there are others within the vehicle repair industry who are looking at this state by state model. [00:35:00] I can't really speak to what they're doing. We do work closely with them, but we're not part of their coalition.
I'm gonna go back to again, we need to see a federal solution because it's what can happen in one state, and you picked up on it, Massachusetts, you're not talking the entire fleet of - what is it, 288 million vehicles on the road? Something like that. It's easy on a state like that. It's not a state like California or New York or Texas, but it's in some of these states, you can make the automakers can make those choices. You can't do that nationwide. And quite honestly, there's so much invested in telematics that this isn't, it's not a workable solution.
Justin Rzepka (CAR Coalition): The Bay Staters have got this great, ballot initiative and we applaud them and I think they are helping drive the federal narrative, but you shouldn't be able to drive across a state border to Connecticut or Rhode Island and not have access to those, those same features.
security-ledger-podc_car-repair-panel_justin_rzepka-nv1pmjtt0_cfr_2022-nov-09-1933pm-utc-riverside: This cries out for a federal solution, right? The the Commerce Clause of the Constitution, I think was ideally written for just this kind of thing, right? This is a [00:36:00] nationwide marketplace. Automotives, are, like Catherine said, there's almost 300 million, we can't go, we can't do this state by state.
And so whether. Massachusetts is upheld, which I hope it is, or whether it gets struck down. Both answers are the same. This needs a federal solution so that all Americans, all consumers can have access to affordable repairs, again, which keeps costs low and and gives people choices.
Paul Roberts (Fight to Repair): Fight to Repair. Just recently reported on a story on Tesla. Basically informing its customers for its Model X and model Y vehicles that if they wanted to use the. The trailer mode software on their car, which adjusts the performance of the car to account for the extra load and the trailer that they have to use the Tesla branded tow package, which includes the hitch and the software update basically and the wiring. So that's not part pairing exactly, but it's basically linking critical safety software to the use of an OEM part. Michael, is that something happening more going forward? A back door part, serialization.
Michael O'Neal (Diamond Standard Parts): Paul, like I [00:37:00] said before, the OEM model is to eliminate the aftermarket parts. Only sell their parts and get the best prices, the highest prices for 'em, regardless of the cost, regardless of the impact on American people. Now what I see is a continuance. They've patented everything, but here's one thing, they don't patent on that truck.
The wheels. You know why? Cause you can replace those wheels with another wheel. Now, these bumpers and other parts in the crash management system, you cannot replace them. So they don't patent the wheels, but they patent the other parts. Again, it's just back door politics at the good old General Motors.
Paul Roberts (Fight to Repair): Justin, thoughts on, on.
security-ledger-podc_car-repair-panel_justin_rzepka-nv1pmjtt0_cfr_2022-nov-09-1933pm-utc-riverside: Yeah, so it was great. I read the same article you did, Paul and Yeah. Unfortunately, they're one of the worst actors in this space, right? They do have an OBD2 port, which is that little thing down by your left knee and it gives you data, environmental data. Again, everyone knows Tesla's are electric vehicles, right?
So there is no environmental [00:38:00] data to be shared in that OBD2 port.
Paul Roberts (Fight to Repair): No emissions, no emissions data.
security-ledger-podc_car-repair-panel_justin_rzepka-nv1pmjtt0_cfr_2022-nov-09-1933pm-utc-riverside: No emissions data. So they're the worst actor. And and I think every car company like Mike was saying, is looking at Tesla and they're saying, oh my gosh. They control their entire vertical.
They control all the parts, they control all the fixing. You want a software update? You have to pay us. You put an aftermarket part in your car. I won't give you the software. So I think they look at them enviously and say, man, my car company wasn't a hundred years old. That's how I would reinvent myself.
That's my opinion. And so I think they're trying to race to all the Tesla. That's their goal. The Ford F-150 Lightning, you can't, you gotta order it online and then go pick it up at the dealer. The GM Hummer, right? That's not available on a lot. You gotta go online and get it. I They're chipping away at that traditional model. And again, it's ultimately, it's rising cost for consumers and giving them less choice.
Paul Roberts (Fight to Repair): So we've seen the FTC take some action against Harley Davidson, for example, for basically telling its customers that it had to use Harley Davidson parts on its on its bikes. Did the same with we Weber grills and so on. Is there any [00:39:00] possibility of getting a ruling like that against some of these automakers for, exactly what Michael's talking about? Just. Forcing customers to use OEM parts instead of aftermarket parts, either directly or indirectly.
Michael O'Neal (Diamond Standard Parts): That's the Harley Davidson thing and the automotive industry. I think it's parallel it is the same thing. Basically if there's no other source for competitive parts, you're forcing a person to use your parts, even if they're not available for three weeks, or even if they're exorbitantly priced
Paul Roberts (Fight to Repair): Yeah.
Michael O'Neal (Diamond Standard Parts): They're forcing you to do this. My time indenture, as I said, to the OEMs, is not part of the deal. When you buy a car, you should have the choice to do whatever you want and you should be able to shop for the best price and the best part, safe part.
Paul Roberts (Fight to Repair): Justin absent getting some of these bills passed the Smart Act and Repair Act is it possible we could see, get some progress just via enforcement of existing
Justin Rzepka (CAR Coalition): Yeah, like we mentioned earlier, the FTC released unanimously, the Nixing the Fix report and they spent a lot of time talking about automotive parts and also [00:40:00] restricting vehicle data as being potentially anti-competitive behavior. They've got a big thing on the FTC website saying, Hey, send us, if you run into a repair restriction, send us a complaint.
They wanna have that data, they collect that anonymously and so there's a big thing on their website. There's also a link to it on the CAR Coalition website. You can go on there and click on it. It'll take you to the FTC website. You can put your complaint in. Again, that was.
Unanimously bipartisan Republicans and Democrats. Another thing to consider Paul is Congresswoman Sikowski from Chicago. She is the chairwoman of the Consumer Protection Subcommittee of the jurisdiction of this legislation. She wrote a letter to the government accountability office gao, the sort of investigative watchdog of Congress asking her to investigate car companies anti-competitive practices.
And so we we understand that investigation could be launching here shortly -- late Fall, early winter. And that's a real serious thing. The GAO is, and that report might take year and a half to come out, but they could uncover some more of these issues. And the government is taking a serious look at that.
And and again, as people in Washington know, the GAO is as a [00:41:00] widely regarded, as a very serious and substantive group. And that could be a very a very serious report when it.
Paul Roberts (Fight to Repair): Okay. Final question. I've kept you all long enough. I know you got jobs to get back to, but this has been great. So we just had a midterm election, right? We've got a couple things. We've got a a lame duck session of Congress through the through December. And then of course we've got a new Congress in 2023.
Catherine, as you 2022 we saw some real progress both at the state level and at the federal level as well on some of these issues. How do you all see, and I'll let each you answer kind of things, panning out in the next year. Do you have reason for optimism or the opposite about where things are going and what changes we might see?
Catherine Boland (Equipment Manufacturers Association): I think we have some reason to be optimistic- build on this momentum we have. We've added successfully 16 different co-sponsors that are bipartisan to Congressman Rush's REPAIR Act. I think in the coming Congress will continue to add more, retain the ones we have who are [00:42:00] coming back to Washington and add more. This is a bipartisan issue. Everyone has consumers in their district, whether you're a Republican or a Democrat, you have consumers who have a need to repair those vehicles. And I think we'll just continue to build on that momentum and I really do think we've got a real shot to see some success over the next two years.
Justin Rzepka (CAR Coalition): Yeah, Paul, I'm a glass half full guy. I think we've had a great year. I think that this movement is real, and I think we're gonna keep building on this success. Like Catherine said, there's an election every two years. People win, people lose. This issue is bipartisan, it's nonpartisan, right? The FTC was unanimous. Like I said, President Biden and Senator Cruz, like this is all walks of
Paul Roberts (Fight to Repair): The New York digital Fair Repair passed overwhelming majorities, bipartisan majorities.
Justin Rzepka (CAR Coalition): mr. Elli from New York is a congressman now and he, that Kathryn mentioned earlier, he held a hearing about this. So I think that this is not a red or a blue issue, a city issue, a rural issue. This is an American issue, consumer issue. And so I think [00:43:00] that no matter who's in charge or who has a gavel, I think that members of Congress wanna deal with this because their constituents are gonna demand it. Yeah. So I'm optimistic, Paul, for a great 2023.
Paul Roberts (Fight to Repair): Good to hear Michael.
Michael O'Neal (Diamond Standard Parts): I think the things that the automotive companies have done by abandoning well, just one has GM, the royalty agreements that allowed us to sell those parts. The United States. Of course we sell 'em in Canada. No problem. Mexico? No problem. But I think that they've taken one step too far at the end of the dock when they went to this back door Monopoly, they're trying to pull off now.
And now I did a white paper with my daughter who's a PhD at the San Diego State University. And in 2016, and I predicted this and I we're doing a new white paper now, and we're gonna expand this further and look really at the back door monopoly [00:44:00] and the patents and how there were functional patents were turned into design patents.
Paul Roberts (Fight to Repair): You need to share that with us at Fight to Repair News.
Michael O'Neal (Diamond Standard Parts): That's right. Absolutely. Be
Paul Roberts (Fight to Repair): We wanna read it. Is there anything I should have asked you that I didn't or anything you wanted to say that I didn't give you a chance to say?
Justin Rzepka (CAR Coalition): Paul we just appreciate you taking the time to highlight automotive. Like you said, there's a great history of right to repair and we wanna keep that history going and we just wanna make sure that we get this fixed and keep the status quo before it gets eroded, before it's too late. Millions of Americans repair cars every day or make parts every day, and we can't lose those jobs. And those be eroded, especially, in today's economy. And so I think that's what we're here in Washington doing is fighting for this right to repair so that we can keep it going and so that Americans have consumer choice. So yeah, keep up the fight. Paul, we appreciate you advocating for us.
Paul Roberts (Fight to Repair): My pleasure. Thank you, all right, Michael O'Neill, justin Catherine Boland, thank you so much for coming on and talking to us.
Fight to Repair is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.